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March 10, 2009
Department of Defense
NSPS UpdatePresented to:
APEX 28 DoD SES Orientation
Mr. Brad BunnProgram Executive Officer, NSPS
March 2009 2
What Is NSPS?
A new civilian personnel management system
Among the Department’s top transformational priorities, NSPS is designed to:
Retain and attract talented and motivated employees committed to excellence
Help DoD respond swiftly and decisively in national security environment
Accelerate the Department’s efforts to create a Total Force of military and civilian personnel
A significant cultural shift to “pay for performance”
Entering third year of phased rollout based on event-driven design and implementation approach.
March 2009 3
System Features
NSPS HUMAN RESOURCES SYSTEM
Classification Jobs in broad “pay bands” based on work nature and competencies (eliminates “GS grades and steps”)
Simple and flexible; short, concise job descriptions
Compensation
Market-sensitive Annual pay increases and bonuses directly linked to
performance
Performance Management
Results-oriented, measurable job objectives linked to mission
Evaluation using standard, validated performance benchmarks
Meaningful distinctions in performance Robust pay pool process to review/validate ratings and
pay decisions for consistency, fairness Employee development with ongoing feedback and
dialogue
Staffing & Employment
Direct hire authority for critical need or shortage occupations
Streamlined hiring process Alternative promotion procedures
March 2009 4
Culture Change
From … To …
Rigid classification system based on 15 grade levels
Broad pay bands encompassing wide range of work
Rules-oriented pay system focused on administration
Market-oriented system that enables compensation approach tailored to organizational mission requirements
Inconsistent, often inconsequential rating systems (i.e., 50% of DoD under Pass/Fail system)
Rigorous 5-level rating system designed to make meaningful distinctions in employee performance
Activities-based management Results-based organization
Automatic pay increases based on passage of time
Pay increases and bonuses based on performance
Administratively challenging processes for assigning/reassigning workforce to meet mission requirements
Enhanced flexibility to shift assignments and workforce to respond to mission
March 2009 5
NSPS Today
Over 200,000 employees currently under NSPS
Training – ongoing Over 600,000 training instances completed
Evaluation & external reviews - ongoing Formal program evaluation part of spiral
development process External reviews continue (GAO, OPM, etc.)
Informing new leadership on NSPS
March 2009 6
NSPS Workforce Demographics
United States
U.S. Territories
Foreign Areas Total
184,983 605 19,245 204,833
Covered (204,833)• White Collar Non-Bargaining Unit Employees*
* 306 employees are now covered in 14 bargaining units established after conversion to NSPS
Not Covered • White Collar Bargaining Unit Employees (245,400)**• Wage Grade Employees (Statutorily Excluded) (120,300)• Others Excluded:
• Defense Labs (excluded until 2011)• Intel• Faculty• PFPA (Police)• SES/SL/ST, HQE
ArmyNavy/Marine Corps
Air ForceDoD 4th Estate Total
74,920 64,017 40,518 25,378 204,833
**Eligible, but no plans to convert to NSPS
Scheduled Coverage (Approx 3,600)• White Collar Non-Bargaining Unit
Employees• Spring - Fall 2009
March 2009 7
Performance Linked to Pay
Employees eligible to receive…
Performance rating Share range Pay adjustments
5 - Role Model 5 – 6 Performance-based pay increase and/or bonus General salary increase (at least 60% of the GS increase) Local market supplement increases (same as GS)
4 - Exceeds Expectations 3 – 4
3 - Valued Performer 1- 2
2 - Fair N/A Ineligible for performance based increase/bonus General salary increase Local market supplement increases
1 - Unacceptable N/A No increases
March 2009 8
January 2009 Payout Results
*Actual Local Market Supplement increase varied by locality area. Averages are weighted.
Data source: Compensation Workbench upload files as of 1/20/09.
Does not include adjustments to ratings based on reconsideration requests.
0.30% 1.30%
55.40%
38.30%
4.70%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
1 2 3 4 5
Rating Distribution
Unacceptable
Fair
Valued
Perfo
rmer
Excee
ds
Expec
tatio
ns
Role
Mod
el
March 2009 9
January 2009 Payout Results
Rating of
Record
% of Total Rated(170,149)
Salary IncreaseAverage
Performance Bonus
TotalGeneral
Base Salary
Increase
Avg Locality
Incr
Avg Performance Salary Incr
AvgTotal
SalaryIncr
1 0.3% 0.00% 0.0% 0.00% 0.00% 0.00% 0.00%
2 1.3% 1.74% 1.0% 0.00% 2.74% 0.00% 2.74%
3 55.4%
1.74% 1.0% 2.73% 5.47% 1.36% 6.83%
4 38.3%
1.74% 1.0% 4.59% 7.33% 2.44% 9.77%
5 4.7% 1.74% 1.0% 6.33% 9.07% 4.09% 13.16%
Overall
100%
1.74% 1.0% 3.67%6.41
%1.94%
8.35 %
Employees rated at Level 1 (Unacceptable) do not receive general base salary or local market supplement increases.Actual local market increases vary by location.
March 2009 10
Key Challenges - Change Management
Employee concerns and perceptions Uncertainty and skepticism over pay for performance Perception of fairness & transparency in performance management and
pay pool process Difficulty in recalibrating expectations
Managers’ and Supervisors’ concerns Lack sufficient skills in goal setting, performance measurement &
assessment, and communicating with employees Perceived administrative burden associated with robust performance
management process
•Typical of major personnel system changes
•Experience with alternative personnel systems indicates it takes 3-5 years for employees to fully understand and accept such changes (as noted by OPM & GAO)
•Addressing concerns via robust training, communication, and transparency – leadership engagement
•NSPS implementation accompanied by unprecedented training effort, focused on performance management skills, particularly for supervisors
March 2009 11
Positive Changes
Employees agree they have a better understanding of expected performance
Meaningful differentiation in performance and rewards
Better communication between employees and supervisors
Stronger connection between individual performance and organization’s mission, goals, and objectives
Pay flexibilities help recruitment
March 2009 12
Employee and Manager Feedback
Performance Employees struggling with “valued performer”
rating Effective job objectives, assessments and
evaluations are difficult to write
Pay Pools Concern with fairness – perceptions
Employee – Pay Pool Manager not my supervisor; doesn’t know what I do; OR, I have a poor supervisor; lack of trust
Rating Official – Pay pool process hard to understand; common understanding of different performance levels
Lack of shared understanding within the pay pool panel
March 2009 13
OPM Assessment
On February 11, 2009, OPM released its second report DoD’s progress with NSPS implementation
OPM officials found improvements in five areas evaluated: Mission alignment Results-oriented performance culture Workforce quality Equitable treatment Plan execution
OPM noted that NSPS encourages better coordination of performance objectives and organizational goals and holds employees more accountable for meeting those goals
NSPS resulted in more positive correlations between performance ratings, pay increases and cash awards
Ensures fairness and high level of transparency in implementing issuances, training availability, performance evaluation, and lessons learned
March 2009 14
Performance Management
70
65
44
48
28
34
35
28
21
25
28
31
36
40
31
30
9
10
28
21
36
26
31
38
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
NSPS
My performance standards/expectations are directly related Non-NSPS
NSPS
My current performance appraisal system motivates me to Non-NSPS
NSPS
The performance appraisal system I am under improves Non-NSPS
NSPS
In my work unit, steps are taken to deal with a poor performer Non-NSPS
Positive Neutral Negative
Note: Some questions also allow for ‘do not know’ or a similar response; not reflected in graphic.
2008 STATUS OF FORCES SURVEY OF DOD CIVILIANS
March 2009 15
Appraisal and Recognition
Note: Some questions also allow for ‘do not know’ or a similar response; not reflected in graphic .
52
47
38
33
59
57
59
65
61
65
24
26
31
32
24
26
16
17
18
19
24
27
28
31
16
16
22
14
19
14
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
NSPS
How satisfied are you with the recognition you receive for doing Non-NSPSa good job?
NSPS
In my work unit, differences in performance are recognized in Non-NSPSa meaningful way
NSPS
Discussions with my supervisor/team leader about my Non-NSPSperformance are worthwhile
NSPS
In my most recent appraisal, I understood what I had to do to be Non-NSPSrated at different performance levels
NSPS
My performance appraisal is a fair reflection of my performance Non-NSPS
Positive Neutral Negative
2008 STATUS OF FORCES SURVEY OF DOD CIVILIANS
March 2009 16
Pay Aspects
55
49
65
62
60
55
42
25
22
25
16
18
17
20
26
29
23
26
20
20
23
25
30
42
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
NSPS
Overall, how satisfied are you with management at your organization? Non-NSPS
NSPS
Considering everything, how satisfied are you with your pay? Non-NSPS
NSPS
My bonus and cash awards depend on how well I perform my job Non-NSPS
NSPS
Pay raises depend on how well employees perform their jobs Non-NSPS
Positive Neutral Negative
Note: Some questions also allow for ‘do not know’ or a similar response; not reflected in graphic.
2008 STATUS OF FORCES SURVEY OF DOD CIVILIANS
March 2009 17
General Matters
Note: Some questions also allow for ‘do not know’ or a similar response; not reflected in graphic.
26
21
34
36
79
73
47
44
31
38
20
21
14
17
26
29
43
40
46
45
7
10
25
24
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
NSPS
Overall, what type of impact do you think NSPS will have on Non-NSPS
NSPS
How likely is it you will leave at the next available opportunity Non-NSPS
NSPS
The people I work with cooperate to get the job done Non-NSPS
NSPS
My work unit is able to recruit people with the right skills Non-NSPS
Positive Neutral Negative
Likely to leave
2008 STATUS OF FORCES SURVEY OF DOD CIVILIANS
March 2009 18
Keys for Leaders
NSPS success at the organizational level depends on senior leader engagement, commitment and leadership
Alignment and outcomes, better job objectives
Commitment and communication
Make resources available – Train your way to success Emphasize accountability at all levels
Earn employee trust, buy-in and confidence in the system by being inclusive at all levels
Engage first-level supervisors
Own it
March 2009 19
What’s Ahead for NSPS?
Inform new leadership on NSPS
Address stakeholder concerns
Continue to monitor, analyze, and evaluate NSPS implementation; make system adjustments and training enhancements where necessary
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